The UK’s higher education sector is under severe financial strain, but are universities across Europe facing similar levels of uncertainty? Drawing on a new report, Alison Wolf writes that strained finances and growing public scepticism have left Europe’s universities facing up to a series of profound common challenges.
Over the last half-century, European countries have moved, at speed, from elite systems of higher education to mass enrolments. Tertiary enrolment is now the default option for school-leavers across the continent.
However, an expert roundtable at King’s College London has underlined the common problems now being faced. The roundtable report, with contributions from higher education experts in a range of European countries, highlights the impact of faltering economic and productivity growth, stressed government finances and university systems that operate increasingly within a global rather than a national context.
A sector under strain
The majority of Western European states, including the UK, now send a majority of their 25–34-year-olds into some form of tertiary education, overwhelmingly in universities offering degree courses. For high-income, developed nations such as theirs, frontier research and innovation are crucial, and universities are, everywhere, the main pipeline of research talent.
However international competition for research talent is acute and affects all countries, which must find the salaries and project funding needed to keep, or attract, top researchers. In large university systems, this global environment mandates competition among domestic institutions as well as among countries and is creating major strains.
In France, for example, system-wide opposition to high differentials or “star” salaries has left most of its higher education institutions unable to compete for talent internationally. Switzerland has high public investment, high salaries and high tolerance for inter-university differences: yet it too faces rising risks from its partial exclusion from EU research funding. This funding is vitally important to European university researchers, especially at a time of severe budgetary constraints.
Financial uncertainty
The size of modern enrolments means that countries generally spend a great deal of money on higher education. As student numbers have continued to rise across Europe, real spending per student has generally fallen.
Universities have to match salaries in other sectors for their growing numbers of administrative and professional staff, as well as, in many cases, competing for research talent with both university competitors and the private sector. They have responded by increasing class sizes, cutting teaching hours and relying more heavily on short-term and part-time academic staff – with measurable effects on the quality of the student experience.
England is an outlier, in having moved to student fees, backed by income-contingent government loans, for the bulk of university teaching income. Even so, with fees frozen in nominal terms for many years, ongoing declines in teaching grants for high-cost subjects and, more recently, falls in international student numbers, most universities face serious fiscal difficulties.
Elsewhere in Europe – including Scotland – high fee levels remain a political taboo: free or near-free university education for domestic students endures. But of course this leaves universities dependent on grants from governments struggling with competing demands.
In our report, France emerges as a particularly acute example of the consequences: junior lecturers with a decade of training can expect a gross salary of around €30,000 a year. But even countries committed to generous support for universities, and to very high research expenditure, such as Switzerland, face budgetary shocks.
Most European countries do now allow universities to charge substantial fees to international students. However, this is most successful as a source of income when teaching takes place in English. This can create serious political concerns and tensions in non-English-speaking countries: notably in the Netherlands. Government pressure and legislation mean that international student numbers in Dutch universities have fallen for three years running.
Meanwhile in England, which has become highly dependent on international students, the government has announced a £925-per-student annual levy on international enrolments from 2028. Since politicians cannot suspend or eradicate the effects of price on demand, this threatens to accelerate the current financial squeeze.
Public scepticism
The report also addresses the broader political context. Across Europe, universities are facing growing public scepticism, culture-war pressures and questions about their value to society.
Many of these tensions are symptoms of the underlying funding crisis – institutions stretched too thin, with too many students and too few resources, struggling to deliver on promises that were never adequately resourced. But they also reflect an environment in which the views and political affiliations of both students and staff are quite homogenous and markedly different from those held by large segments of the electorate.
Academic autonomy is fundamental to the history, nature and success of universities. But it is inevitably threatened if they are seen by many politicians, and voters, as divorced in their concerns and values from those of the wider society. In many European countries, universities do not enjoy the level of formal institutional autonomy found in, for example, England.
In Sweden, for example, governments appoint external board members and could, if they so wished, interfere widely and directly in university affairs. When universities enjoy strong support from the public and governments, the latter are inclined to maintain a trusting and hands-off approach. But the report flags concerns about whether this can continue.
Common challenges
Underpinning many of these developments is the decline in the graduate premium: the extra amount that graduates earn as a direct result of earning a degree. For decades, governments across Europe saw the growth of university enrolments as unequivocally positive, delivering better life-chances and higher earnings for students and directly fuelling economic growth.
Since the value of the premium involves comparing graduates with non-graduates, and looks at average earnings, it is almost bound to fall as the graduate group gets bigger and the non-graduate one smaller. And graduates do still earn more, on average.
However, today, many individual graduates are not earning a lot, not doing “graduate” jobs and not finding employment easily. Low growth and flat-lining productivity call into question the belief that expanding higher education will itself generate growth.
There was always a strong element of faith in the argument that it would. The waning of that faith, alongside ageing populations, growing government debt, the impact of AI and geopolitical upheaval all create major common challenges for Europe’s universities.
For more information, see the accompanying report, European Higher Education in the 2020s: where are we heading?, published by the Policy Institute at King’s College London.
Note: This article gives the views of the author, not the position of LSE European Politics or the London School of Economics.
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